UPDATE 2-Linde plans buybacks, further investments as earnings continue to grow
(Adds conference call quotes, share performance)
July 30 (Reuters) - U.S.-German industrial gas producer Linde plans additional share buybacks and investments, particularly in electronics, after higher pricing and strong volumes across all its markets led it to hike its 2021 earnings guidance again on Friday.
The world's leading supplier of oxygen to hospitals worldwide during the COVID-19 pandemic said it now expects 2021 adjusted earnings per share to rise 23-25% year-on-year, versus previous guidance for a 17-19% increase.
Chief Financial Officer Matthew White told a conference call following its second quarter earnings that Linde would continue to use excess cash for share buybacks and that the group's cash reserves would be higher next quarter.
Linde has consistently beaten analysts' quarterly estimates over the past two years, according to data compiled by Refinitiv.
Chief Operating Officer Sanjiv Lamba told the call the company was reviewing hundreds of prospective projects amounting to more than $10 billion of potential investment, "including a significant number of electronics and clean energy projects."
Linde's electronics business, which brought in 10% of sales last year, has benefited from strong demand for consumer electronics under coronavirus lockdowns.
While the group's electronics and healthcare divisions remained strong in the second quarter, cyclical segments such as manufacturing, metals, and chemicals and refining all also saw double-digit growth.
Industrial gas producers tend to have significantly lower exposure to economic fluctuations due to their long-term contracts, monthly fixed fees and rental income for cylinders.
But with Linde's more cyclical businesses accounting for 62% of the group sales, a broader rebound could significantly lift the company's earnings, it said.
The group's second-quarter adjusted earnings per share came in at $2.70, above the $2.54 forecast from analysts polled by Refinitiv, and beating its own guidance of $2.50-$2.55.
Linde had already hiked its 2021 earnings outlook in May, as a strong performance in its healthcare business helped it beat first-quarter forecasts.
Its Frankfurt-listed shares were up 3% by 1445 GMT, outperforming Germany's DAX and topping the European chemicals sector index.
(Reporting by Bartosz Dabrowski in Gdansk; Additional reporting by Jagoda Darlak; Editing by Kirsten Donovan and Nick Tattersall)
